Mastercard Digital Enablement Fee
Wondering about the “digital enablement fee” on your credit card processing statement? Mastercard’s Digital Enablement Fee is a charge to businesses that accept card-not-present transactions, such as ecommerce websites.
Let’s take a look at when the fee is charged, how much it is, and how to spot it.
- What is the Digital Enablement Fee?
- Credit Card Assessments
- Where to Find the Digital Enablement Fee
- Can I get the Digital Enablement Fee lowered?
What is the Digital Enablement Fee?
Mastercard’s Digital Enablement Fee is an assessment charge that was implemented in January 2015. The fee applies to all “card-not-present” transactions (typically ecommerce sales) including credit and signature debit cards, with the fee going to Mastercard.
As of January 2018, the Digital Enablement Fee is set at 0.01% of your card-not-present volume.
The Digital Enablement Fee helps with the costs of advanced security features for card-not-present transactions, such as encryption (scrambling card data) and tokenization (replacing card data with a “token” that is meaningless to hackers.) Mastercard expects the use of tokenization to increase, and seeks to offset the costs and receive compensation for that increase through the digital enablement fee.
Encryption and tokenization help protect cardholders when they make purchases online.
Credit Card Assessments
Assessment charges are one of the three components of credit card fees, along with interchange and processor markup. Assessments are set by the card brands and remitted to them through your processor. The Digital Enablement Fee is one of many different assessments that Mastercard charges.
See the full list of Mastercard assessments.
Where to Find the Digital Enablement Fee
Depending on the pricing model your processor uses, you may see the Digital Enablement Fee listed or you may not. The fee should be listed on interchange plus and tiered statements, but will usually not be listed on flat rate statements. Note that just because the fee isn’t listed on a flat rate statement doesn’t mean that you aren’t paying it. It simply means that the fee is lumped in with other charges and packaged under one “rate.” More on that in the flat rate section below.
It's also worth noting that while the fee will usually be listed on a tiered statement, it usually is not disclosed as part of your "rate" when signing up with the processor, which can make your pricing appear lower than it will really be. You can identify tiered processing by the presence of “qualified” and “non-qualified” rates. Look for anything labeled QUAL, NONQUAL, or NQUAL. Read more about tiered pricing.
The Digital Enablement Fee on Interchange Plus and Tiered Statements
On an interchange plus or tiered statement, the Digital Enablement Fee should be clearly listed in the assessments section.
The image below shows 3 different ways that you may see the fee listed. It could be written out completely, as in the top line, or be abbreviated, as in the middle and bottom lines.
In each line, you'll also see the rate, the amount on which it was charged, and the total fee. In the top and middle lines, the 0.01% fee has been converted to a decimal, displayed as .000100. In the bottom line, it has been left as a percentage despite the lack of percent sign. You can check the processor's math by multiplying the decimal by the transaction amount.
In the top line, 0.0001 * 2,485.56 = 0.248556, which rounds to $0.25, which is the fee charged and matches the column on the far right.
In the middle line, 0.0001 * $2,431.25 = 0.243125, which rounds to $0.24, which again matches the column on the right.
In the bottom line, we need to remember to multiply by the decimal (0.0001) not the percentage (0.01). So 0.0001 * 11,304.50 = 1.13045, which rounds to $1.13.
If you secured a processor through CardFellow, you can be assured that assessments are passed to you at cost, with no added markup, and that we check to make sure assessments are priced correctly when we conduct your free statement audits. You do not need to do the math yourself when you receive statements.
If you’re not a CardFellow client, there’s no guarantee that assessments are passed to you at the cost that Mastercard sets. You would need to check each assessment individually to determine if the costs have been padded. Ethical processors do pass the fees to you with no added charges, but some processors may add to the fees without telling you.
As of January 2018, Mastercard’s Digital Enablement Fee is set at 0.01% of your card-not-present volume. To determine if you’re being charged correctly, the total Digital Enablement Fee should equal 0.01% of your total card-not-present credit card sales.
The Digital Enablement Fee on Flat Rate Statements
If you use a flat rate credit card processor, such as Square or Stripe, you will usually not see individual assessment fees listed on your statement. However, that doesn't mean you aren't paying the fee - it's simply factored in to your "flat rate."
While flat rate looks simpler, it's not often the most competitive. Remember, assessments aren't "extra" fees that flat rate eliminates. Assessments are part of every transaction. It's just a matter of whether you see them (and can therefore determine if they're charged to you at cost) or if they're concealed from you. Read more about flat rate pricing.
Can I get the Digital Enablement Fee lowered?
No, it’s not possible to negotiate the Digital Enablement Fee or other assessments. The only part of cost that is negotiable is the processor’s markup.
That said, many businesses overpay for credit card processing and could lower costs by securing a more competitive markup. You can see how much you could save by using CardFellow’s free quote comparison tool to get instant quotes with no obligation. Try it now!